A special initiative by ICICI Lombard GIC Ltd. and CNBC-TV18 as part of the India Risk Management Awards

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"If you don't invest in risk, it does not matter which business you are in; it's a risky business"

, aptly quoted Sahil Kangotra, Head Corporate Solutions Group (West & East), ICICI Lombard GIC Ltd., in his special address at the risk masterclass, an exclusive initiative under the aegis of the India Risk Management Awards. Setting the tone for the event, Sahil spoke about the expanding role of ICICI Lombard General Insurance as a risk solution provider. He proudly spoke about two recently launched initiatives, the pioneering IOT-based fire hydrant systems, and wellness solutions to promote preventive healthcare. Despite the geopolitical risks associated with the on-going war, he is bullish on India’s growth to become a $5 trillion economy by 2026.

Mr. Rajendra Chunodkar, President, Manufacturing Operations, Lupin Ltd., delivered an insightful keynote talking about the challenges and change experienced by the Pharma sector in the recent years. Despite the optimistic outlook of a 10-12% CAGR by 2030, when the Indian pharma space will touch almost $130 billion, the industry is not without its fair share of trials and risks, as he mentioned. Rajendra cited some of the major concerns, such as price erosion due to customer consolidation, lesser products going off patent, regulatory issues, talent attrition, an increase in input costs, and the delay in the availability of electronic components. To combat these risks, Lupin worked on alternative vendor arrangements, switching to alternate fuels, and manufacturing some of the raw materials themselves. He highlighted how Lupin turned around the China factor to their advantage by some of these strategies.

The talk was followed by a panel on "Thriving in the Era of Stagnation and Distress." The panelists comprised Sandeep Batra, the Executive Director, and CFO, Pidilite Industries Ltd.; Monica Yadav, Vice President, CPC & Group Head Insurance, JSW Group, Sunil Singh, Chief Insurance, Reliance Industries Ltd.; and Sanjay Datta, Chief-Underwriting, Reinsurance & Claims, Actuarial, ICICI Lombard GIC Ltd. Lifting the illusionary veil, Sandeep spoke about how businesses cannot insulate themselves from uncertainty; rather, there needs to be adequate scenario planning and good practices built into the systems. He added, "Try and avoid any shocks to the main business, so build enough buffers so that sudden shocks don't come and throw the business totally out of gear". Elevated inventory norms helped Pidilite wade through the disruptions in supply chains caused by COVID-19. On the other hand, Monica highlighted the need for diversifying sources to reduce external dependencies. Sanjay put the spotlight on the domino effect of risks that plague organisations and how a holistic understanding of the same will help navigate multiple crisis scenarios. He cautioned, "Eternal vigilance on the risk side", he drew an analogy based on the airline industry, which has risk management firmly embedded in its daily DNA of operations. Sunil foresees growth coming from the medical tourism, manufacturing, and automobile sectors, specifically the EV space, which is poised to grow in the coming years. He further stated that harnessing alternative energy mediums such as solar power and other renewable sources is predicted to provide 80% of the total power generation by 2030.

The last panel for the evening revolved around the theme of "Building resilience in times of economic distress". Panelists included Aravindan Raghunathan, Global Head-Liability & Property Insurance, Tata Consultancy Services; Rajeev Aggarwal, Chief Financial Officer, KEC International Ltd.; and Sanjay Datta, Chief - Underwriting, Reinsurance & Claims, Actuarial, ICICI Lombard GIC Ltd. Given the recessionary headwinds, Aravindan drew the focus on the need to look at new markets, unchartered domains, emerging technologies such as AI and ML, investing in talent, innovations, and cost optimisations. All of these, he said, had to be done without compromising on quality or consumer satisfaction. Speaking on lessons learned from past economic downturns, Rajeev stressed the importance of diversification in the entire value chain, quoting, "Risk assessment has to be holistic, and you have to diversify your entire value proposition throughout your entire business". Sanjay also discussed the interconnectedness of various risks, whether pure or speculative. He drew attention to financial risks in terms of capital flows, P/L risks, and human resource risks—he quoted an example, "Engineering companies are now being led by finance people because they understand when they're quoting long-term speculative risk".

You can watch the entire discussion here: https://youtu.be/efnTP8JD4Ng

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